⇔ What is the process for obtaining PPF ?
The Public Provident Fund (PPF) is a popular long-term savings scheme backed by the Government of India, offering tax benefits, attractive interest, and assured returns. It encourages individuals to save regularly with a lock-in period of 15 years. Here is a detailed step-by-step guide to obtaining a PPF account:
1. Eligibility
• The PPF account can be opened by any Indian resident individual.
• NRIs are not eligible to open a new PPF account but can continue an existing account until maturity.
• A minor can have a PPF account opened by a guardian.
2. Choose the Financial Institution
• PPF accounts can be opened at:
• Banks authorized by the Government of India (both public and private sector banks).
• Post offices across India.
• Many banks also offer online facilities to open and manage PPF accounts via net banking.
3. Visit the Branch or Use Online Facility
• To open a PPF account, you can visit the nearest bank branch or post office offering the scheme.
• Some banks provide an option to open PPF accounts online through their internet banking portal.
4. Fill the Application Form
• Submit the duly filled PPF account opening form.
• For minors, the guardian must fill in the application form with their details as well.
5. Submit Required Documents
• Proof of Identity (such as Aadhaar card, PAN card, passport, voter ID).
• Proof of Address (such as utility bills, Aadhaar card, passport, driving license).
• Passport size photographs of the applicant (and guardian if a minor).
• PAN card copy is mandatory for tax purposes.
6. Initial Deposit
• Make an initial minimum deposit of ₹500 to open the account (amounts up to ₹1.5 lakh can be deposited per financial year).
• Deposits can be made either in cash, cheque, or online transfer, depending on the bank/post office rules.
7. Receipt and Passbook
• Upon account opening, the bank or post office issues a PPF account passbook or statement that records all deposits, withdrawals, and interest.
• If opened online, access to an electronic statement or passbook will be made available.
8. Account Tenure and Contributions
• The PPF account has a minimum tenure of 15 years, extendable in blocks of 5 years after maturity.
• A minimum contribution of ₹500 and a maximum of ₹1.5 lakh can be deposited within each financial year.
• Deposits can be made in lump sum or installments within the financial year.
9. Withdrawals and Loans
• Partial withdrawals are allowed from the 7th financial year onwards.
• Loans against the PPF balance are available from the 3rd to the 6th year on specific terms.
10. Tax Benefits and Interest
• Contributions qualify for deduction under Section 80C of the Income Tax Act.
• Interest earned and maturity proceeds are tax-free.
• Interest rate is fixed quarterly by the Government and compounding is yearly.